This research report on the Americas data center colocation market cover sizing and forecast, share, industry trends, growth drivers, and vendor analysis. The study includes insights on the segmentation by electrical infrastructure (UPS systems, generators, transfer switches and switchgears, rack PDU, and other electrical infrastructure), mechanical infrastructure (cooling systems, racks, and other mechanical infrastructure), general construction (building development, installation and commissioning services, building designs, physical security, and DCIM) service type (Retail and wholesale), and geography (North Americas (US and Canada) and Latin Americas).
The adoption of cloud-based services, especially IaaS, is growing significantly in the Americas. Large organizations have successfully implemented business-specific software-as-a-service (SaaS) solutions, thereby increasing the demand for cloud computing in the Americas. It is expected that more than 85% of colocation facilities in the US will be cloud-enabled at the end of the forecast period. Several organizations in Canada and Latin America are expected to shift to cloud-based service offerings, thereby increasing the demand for wholesale colocation. Hence, the rise in hybrid infrastructure services is projected to drive the Americas data center market.
The procurement of renewable energy sources and the installation of efficient infrastructure solutions are other significant factors contributing to the growth. The installation of modular infrastructure is the top priority for colocation server hosting companies in the global market. Investments in wholesale colocation facilities with the construction of multiple data halls and power capacity of over 1 MW will grow significantly during the forecast period. In terms of services, vendors will continue to build both retail and wholesale spaces, increasing occupancy to over 90% in the leading colocation market.
The Americas data center colocation market is expected to grow at a CAGR of over 8% during the period 2018–2024.
This research report includes detailed segmentation by electrical infrastructure, mechanical infrastructure, service type, general construction, and geography.
Insights by Electrical Infrastructure
The US data center colocation market has witnessed increased adoption of UPS power systems. Service providers are adopting UPS systems with lithium-ion batteries in N+1 and 2N configurations. Generators, transfer switches, and switchgears are also witnessing high acceptance in the US market. The diesel generator segment is also expected to grow in the next few years. However, the gas and bi-fuel generator segment is likely to witness steady growth due to the growing awareness of carbon emissions, especially in the US. DRUPS systems are expected to witness adoption in the US facilities during the forecast period. The adoption of switchgears is likely to grow because of the increased construction of large and mega facilities that require medium- and high-voltage switchgears.
Latin American operators are procuring more redundancy for generators than other infrastructure because of the power reliability challenge. Power infrastructure commonly adopted in the facilities includes VRLA battery-powered UPS systems, diesel generators, low to medium voltage switchgears, and basic PDUs with monitoring capabilities.
Insights by General Construction
Site selection is a major criterion for data center operators. However, tax incentives and the availability of free cooling solutions are other key factors that play an important role in data center development. Many states provide investment and property tax, sales tax, and job-based tax incentives. In 2018, the Illinois government introduced a new capital spending plan, which includes exemption on sales tax for electrical equipment, including servers, cooling racks, and plumbing supplies.
The market in Canada is witnessing the growth of Brownfield and Greenfield development projects. In Canada, around 25% of organizations have facilities that are older than 10 years. It is expected that brownfield developments in the country will continue to grow. Most facilities will be designed according to tier III standards, aiming to achieve the Uptime Institute certification and flexible designs.
Insights by Mechanical Infrastructure
Several facilities, which are located in the extreme climate, have adopted free cooling techniques in North America. Service providers are equipping high-efficiency indirect evaporative cooling (IDEC) units with indirect airside economizers configured in N+1 redundancy. The use of chilled water-based systems is still prevalent among several facilities, which is aided in the adoption of innovative solutions for low power consumption. Besides, the adoption of direct liquid cooling and liquid immersion cooling solutions is also growing among operators in the US. The US facilities are also focusing on procuring renewable energy sources and high-efficient and energy-saving lightening equipment. A majority of facilities in Canada are developed with a PUE of less than 1.5. Several facilities operating in Canada use free-cooling techniques and water-based cooling solutions.
Insights by Service Type
The retail colocation market is likely to be driven by the increased demand for services from organizations, especially in Latin America. Retail services are highly suitable for those operators that require small computing services at a single site or multiple locations in the region. However, several existing retail service users are expected to opt for wholesale colocation capacities during the forecast period.
The adoption of wholesale colocation services is growing significantly in the US and Canada due to the increased demand for computing capacities from global enterprises, cloud providers, big data, and IoT organizations. With the increase in demand for cloud solutions among leading cloud service providers, the need for wholesale facility space is growing. The Latin America market is likely to witness the growth of wholesale services during the forecast period.
Insights by Geography
The US is dominating in the Americas data center colocation market on account of increased investments from colocation service providers. In Canada, the growth is likely to be aided by the construction of facilities in Montreal due to the availability of renewable energy sources and low power costs. The growing demand for hybrid infrastructure and secure IT infrastructure hosting has increased the demand from colocation services. To enhance operational capacity, reduce capital investment, and decrease operational costs, enterprises are adopting colocation services in the region.
The market in Canada has grown significantly in the last two to three years. The increased presence of hyperscale cloud-service providers is boosting the growth in the country. The market is strongly driven by the adoption of cloud-based service, IoT, and big data.
In the Latin American region, Brazil is the major contributor to the colocation market, accounting for more than $200 million toward investment in facility expansion. Countries such as Argentina, Bolivia, and Ecuador are expected to make a significant contribution to the market during the forecast period. In Brazil, Equinix and Ascenty expanded their presence with multiple projects in 2018. Besides, two major submarine cable projects are expected to be completed that will establish strong connectivity between the US and Brazil.
Key Regions Profiled:
Key Vendor Analysis
In terms of investment, the Americas market is led by Digital Realty with newly built projects in the US and Canada. Vantage Data Centers invested around $360 million in Ashburn and Santa Clara facilities. In Latin America, Brazil witnessed increased development of facilities by Ascenty and Equinix. These service providers are investing in the expansion of Brazil's facility with an investment of around $50 million Year on Year. Equinix is investing in the expansion of the Sao Paulo facility with an investment of about $47 million. In 2018, Ascenty and Equinix were the largest investors in Brazil. The investment is expected to grow in Latin America during the forecast period with Ascenty planning to invest in other countries and telecommunication providers such as Telefonica and Entel aiming for facility expansion. In 2018, Digital Realty and Brookefield Infrastructure acquired Ascenty. Digital Realty expanded its presence in Canada by investing in Toronto, Canada, and in Virginia, Texas, Illinois, New York, California, and Florida, US. Digital Realty and Equinix are leading operators in the region.
Key Company Profiles
Other Prominent Vendors – 1547 Critical Systems Realty, 365 Data Centers, Ascenty, AT&T, Axtel, Bell Canada, CentriLogic, CloudHQ, Aptum Technologies, Cologix, DataBank, Data Foundry, EdgeConnex, Entel, Expedient, Flexential(PEAK 10 & VIAWEST), Green House Data, H5 Data Centers, I.C.E Data Center, Stack Infrastructure, Internap, KIO Networks, ODATA (Patria Investimentos), Quality Technology Services (QTS Realty Trust), RagingWire Data Center (NTT), Rogers Communications, Root Data Center, Sabey Data Centers, Stream Data Center, T5 Data Center, TigoUne (UNE EPM), TierPoint, Telefónica, Urbacon designs, Vantage Data Center, vXchnge, and Zayo Group Holding.
Key Market Insights Include
The report provides the following insights into the Americas data center colocation market for the forecast period 2019–2024.
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